On 26 March the Chancellor confirmed that the self-employed will receive the same benefits as furloughed employees.
Self-employed individuals with trading profits of up to £50,000 will be eligible for taxable grants worth 80% of their average profits. The average will be taken over the last 3 years unless accounts are not available for that period, in which case the individual will be assessed on what information is available. The grant will cover up to £2,500 a month and will be available for 3 months.
To be eligible you must:
- have a trading profit of no more than £50,000
- have filed an Income Tax Self Assessment tax return for the tax year 2018-19
- have traded in the tax year 2019-20
- be trading when you apply, or would be except for COVID-19
- intend to continue to trade in the tax year 2020-21
- have lost trading/partnership trading profits due to COVID-19
- earn the majority of your income (more than half of your income) from self-employed work
You do not need to apply for this grant. If eligible, you will be contacted by HMRC direct to complete an online form so that they can pay the grant straight into your bank account.
The money will be available as a lump sum from the beginning of June and will be a taxable benefit to be filed in tax returns by January 2022.
In the meantime, if you are self-employed and need more immediate assistance with cashflow, you may benefit from the following other emergency measures announced:
- access to Universal Credit
- the Coronavirus Business Interruption Loan (applications opened on 23 March)
- income tax payments due in July can be deferred to the end of Jan 2021
If you have any questions related to your specific circumstance, please contact your relationship principal or email intouch@haroldsharp.co.uk.